Anisul Islam Noor :
The Ministry of Finance has sought from the Energy Division under Ministry of Power, Energy and Mineral Resources in detail the cost of fuel oil import and its selling price in local market to adjust the rate in line of global price.
The Ministry has taken the initiative after questions raised from businesses as the country remained the highest fuel oil price in the whole of Asia.
The government last made changes to the domestic oil prices three years back on January 4, 2013. At that time, it raised the prices by 11.47 per cent to balance the losses incurred by the BPC. The price of Brent crude, the benchmark in oil price on the international market, had climbed up to US$ 120 per barrel during the month.
The rate slumped to a low below $28 per barrel on Saturday as the market anticipated a rise in Iranian exports of oil after the lifting of sanctions against the country.
The Energy Division may submit a document to the Finance Ministry within this week mentioning in detail the fuel import, carrying and selling rate of all items, sources said.
State Minister for Power, Energy and Mineral Resources Nasrul Hamid said, “We will submit the relevant documents to the Ministry of Finance containing the details of the present fiscal condition of the BPC.”
“We would not recommend any level of the rate cut, it is for the Ministry of Finance to decide,” he said.
The Energy Division is preparing the paper in response to a letter from the Finance Ministry to facilitate adjustment of the domestic oil prices rationally with the drastic fall in international market.
Oil prices on the international market went on a downturn in June 2014 due to an abrupt increase in overall supply.
But the government remained unmoved, keeping the domestic oil prices unchanged to allow BPC to make profit, which it targeted to use in lowering its debt due to subsidized sale of the fuel oils.
Bangladesh is among very few countries that kept the domestic oil prices higher despite the drastic fall in international oil prices.
“Even the price is the highest among the South Asian countries,” said one official.
The petroleum corporation, which had never attained profit over the past 14 years of its operations since fiscal year (FY) 2002, already bagged a profit worth around Tk 52.68 billion (provisional) in FY 2015, according to the BPC.
“I think time has come for a downward adjustment to pass on the benefit of the lower oil prices of international market to country’s people,” said a senior official.
The BPC has almost covered its losses, he said, requesting anonymity.
The corporation currently imports around 5.50 million tonnes of crude and refined oils combined from international market every year to meet overall local demands in different sectors, including fuel-guzzling ones like industries, power, and irrigation.
During the past hike of January 2013, the government, by an executive order, increased the prices of diesel and kerosene by Tk 7 per litre each to Tk 68 per litre and petrol and octane by Tk 5 per litre each to Tk 96 per litre and Tk 99 per litre respectively.
However, the price of furnace oil was kept unchanged to its previous rate of Tk 60 per litre.
